Australian Telecom Industry News

Optus CEO highlights NBN monopoly risk

March 1, 2011

Optus CEO Paul O’Sullivan has suggested splitting up the NBN into geographical regions to level the playing field. This is similar to what the US Government did in the mid ‘70s to break up the monopoly telco AT&T into “baby Bells” (smaller regional phone companies) to increase competition.

The wisdom of creating a new government owned monopoly telco is questioned by many in the industry. The fear is that competition could suffer as Telstra’s $11 billion deal with NBN Co would give it a huge advantage in buying market share as customers move to the NBN.

If Telstra is given an advantage in the new NBN world, it could severely impair competition for many years to come. This is an even greater risk with the NBN as it is expected services delivered via the NBN such as TV, broadband, voice and cloud services will be much more sticky than they are today where it is relatively easy to change providers.